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Will CPI Boost the US Dollar Again?
What will happen?
The Consumer Price Index will be out at 15:30 MT (GMT+2) on Wednesday, January 12.
This index is the primary inflation indicator in the country. At the same time, inflation is significant to currency valuation because rising prices lead the central bank to raise interest rates.
Last time, the actual results outperformed the predictions, and the inflation in the United States hit its top for the past 40 years. However, traders expected these numbers, and the US dollar strengthened beforehand. As a result, the element of surprise was lost, and the USD reversed down after the announcement. EUR/USD gained 570 points!
How to trade on the US CPI?
- If the indicator is greater than the forecast, the USD will likely rise against other currencies.
- If the indicator is lower than the forecast, the USD will likely fall against other currencies.
Instruments to trade: EUR/USD, USD/CHF, GBP/USD.
Consumer Price Index, Existing Home Sales, US Fed rate decision - all of these things we will discuss in our new review. Don't miss it out!
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
A new trading week is coming…
News is always important part of the market. What do we expect today?
What a day was yesterday! Let’s jump right in!